Nucleonics challenges Benitec-CSIRO RNAi patent

Pennsylvanian anti-viral therapeutics developer Nucleonics has opened a new front, on Australian soil, in its battle with Brisbane biotech Benitec (ASX:BLT) and Australia’s national research agency, CSIRO, over ownership of key patents for the revolutionary gene-silencing technology called RNA interference (RNAi).

Nucleonics remains the lone holdout in lawsuit a brought by Benitec against three US biotechnology companies in the US District Court in Delaware last March, alleging infringement of US Patent No 6,573, 099, 'Genetic constructs for delaying or repressing the expression of a target gene'.

The other companies, Ambion and Genscript, have since agreed to pay royalties to Benitec.

Nucleonics has declined to pay. The company, which is developing RNAi-based therapeutics for Hepatitis C and HIV-AIDS, has in-licensed a rival RNAi technology, patented by American researchers, Dr Andy Fire, of Stanford University, and Dr Craig Mello, of the University of Massachusetts Medical Schools. The Fire-Mello patent is based on observations of RNA silencing in the nematode worm C. elegans.

Nucleonics announced yesterday it has asked Australia’s Commissioner of Patents to review Australian Patent No 743316, jointly held by CSIRO and Benitec, titled 'Control of gene expression'.

The company’s CEO, Robert Towarnicki, said the Benitec patents were "fatally flawed" -- not only in Australia, but in the US and all other jurisdictions where they had been granted. "We intend to vigorously defend our right to continue to develop needed therapeutics for chronic viral diseases such as hepatitis B and hepatitis C around the world," he said.

Nucleonics has submitted what it believes are 24 examples of prior art to the Australian Patent Office that it believes invalidate the Benitec-CSIRO patents on RNAi gene-silencing. It is also claiming the patents lack novelty because they do not involve an inventive step, that they are ambiguous, and that the original specification lacks support.

Towarnicki said Nucleonics would seek to have the patents invalidated in the Australian courts if the patent review failed. It was also compelled by Benitec’s US lawsuit to request a similar review by the US Patent Office, and planned to do the same in other jurisdictions.

The patent review is an out-of-court test of the validity of the patent -- the Commissioner of Patents does not consider the issue of patent ownership, but reviews the original patent examination to determine whether it was carried out correctly.

CSIRO Plant Industry IP manager Dr Rob de Feyter said that, after lodging its request, Nucleonics would have no further involvement in the patent review process, which was a matter between the Australian Patent Office and the patentees, Benitec and CSIRO. De Feyter said the review had three possible outcomes: the patent could either be revoked, amended in the light of new information, or remain unchanged. "It’s rare that a patent is revoked," he said.

'No merit'

Benitec’s CEO, John McKinley, who is currently in the US, said Nucleonics had not yet formally notified Benitec of its Australian patent-review application.

"But we do not believe it has any merit whatsoever," McKinley told Australian Biotechnology News. "We’d rather settle the issue by way of licensing, and we’re open to do so, on a worldwide basis.

"We thought they might look to take this sort of action, but it’s inconvenient, costly and unnecessary. Obviously, we have patent insurance through Lloyds of London."

McKinley said the Nucleonics press release was "very generic" in nature, and contained a large number of inaccuracies, including its claim that Benitec’s patent applications failed to cite the Fire-Mello patent as "an important, earlier work".

Asked why Nucleonics had chosen to request a patent review, Towarnicki told ABN that "Benitec is using its IP as a way to control our business and interfere with it.

"We think the IP was wrongly issued around the world, and Benitec continues to behave in the same way around the world, in all their filings," he said. "After a lot of discussion, we made the decision to be proactive and go after them around the world.

"We’re forced by the [Benitec] lawsuit to do that -- we have multiple avenues of appeal through the courts, but we also have the option of examining revocation in the US."

Towarnicki said the decision to seek a review in Australia was partly motivated by Nucleonics’ discovery that Benitec, through a third party, had filed an opposition to the Fire-Mello patent in Australia, and that the Australian Patent Office had only recently changed the name of the filing agent to Benitec.

Syngenta opposed

Benitec and CSIRO were also opposing an application for an Australian RNAi patent for an invention named 'Gene Silencing', by the multinational agbiotech company Syngenta.

Towarnicki said Nucleonics’ patent review applications would proceed in parallel to the US court case, in which the lawyers were already scheduling discovery. "We expect this should be resolved in the courts within the next 12 to 18 months," he said. "Our own patent attorneys have been very encouraging, but we also have encouragement from an independent source.

"Benitec filed its suit against us a week before we closed a US$49 million financing deal. Our investors had done their due diligence using their own, independent law firm -- one they paid for themselves."

Towarnicki said the independent opinion had been crucial to the company closing the financing deal after the lawsuit was filed. "So, between our investors’ law firm and our own lawyers, we’re quite confident of our position," he said.

A CSIRO Plant Industry research team claims to have discovered RNAi gene-silencing in 1993. Dr Peter Waterhouse's research team demonstrated its application in a landmark experiment in tobacco in 1994, but CSIRO did not lodge its patent with the Australian Patent Office until April, 1998.

Benitec and the Queensland Department of Primary Industries filed a patent a month earlier, in March, 1998.

The Carnegie Institute of Washington and the University of Massachusetts had filed their patent, based on the Mello-Fire discovery, with the US Patent Office nearly three months earlier, in December 1997, and Syngenta also filed its patent application, relating to an RNAi silencing gene vector system, before the CSIRO and Benitec patents.

However, the issue of priority is complicated by the fact that, unlike most patent offices around the world, the US Patent Office recognises priority based on the date of invention – the original experiment - not the date of filing.

Benitec’s McKinley said his company was very confident of its position. "Our position is not only backed by both sets of solicitors [Benitec’s and CSIRO’s], we now have eight patents issued in five jurisdictions, including the USA, UK, Singapore and Australia," he said.

"We’ve been extensively examined by the patent offices in these countries. We’ve also been reviewed by Merck, which took a licence from us after many months of due diligence."